Sentiments in the Real Estate Sector to Remain Optimistic in the Present and Future

The sentiment of the key players in the real estate sector continues to be a key determinant of how the industry would perform. In the Indian real estate sector, the sentiment has slightly dipped from 68 to 62 in recent years. This is evident amidst a constantly evolving scenario in the economy of the country. According to experts, the sentiment in the real estate sector was significantly high. However, there were two consecutive hikes in the repo rates, which had a negative impact on this.

According to the report, the Future Sentiment Score, which captures the sentiments of the stakeholders for the subsequent 6 months in the real estate sector, was historically high at 75 in the first quarter of 2022. However, in the second quarter, it dipped to 62. This was due to pressure due to high inflation and the weakening of the rupee against the dollar.

That said, both the current and future sentiment scores remain optimistic, despite the decline, the report said, adding that the impact of global economic headwinds on the Indian economy is yet to play out.

The supply side of stakeholders is vigilant of the different global risks. These include the economic turmoil in the US, Europe’s economic shutdown, and the war between Russia and Ukraine. An expert also revealed that the residential real estate sector has been developing a latent demand over the last eight to ten quarters. Along with the right prices of properties, these have successfully converted to sales. So, the real estate sector, which was reeling under several challenges during the pandemic, has made a strong comeback.

Currently, some geopolitical issues pose some challenges for the residential real estate sector. However, the prices are high due to the increasing repo rates. In spite of this, there continues to be a strong demand that has been shaping a positive outlook of the real estate sector. Some experts also believe that when you consider the global economy, the real estate sector in India continues to be a bright spot. The overall world order and economic condition also remain cautious. In the Indian economy, strong fundamentals as well as the realty sector provide strength to different stakeholders that include the development authorities, developers, end consumers, and policymakers.